Bring grant-vetting process into the light

The U.S. Office of Inspector General (OIG) has launched an inquiry into the $50.6 million grant awarded to Motorola — which the vendor was expected to use to help fund the buildout of a 193-site LTE network for public-safety agencies in the San Francisco Bay Area — and that’s a good thing.

Indeed, it would be nice to know what due diligence the National Telecommunications and Information Administration (NTIA) went through to dole out — in conjunction with the U.S. Department of Agriculture (USDA) — $7.2 billion in broadband stimulus money.

In a letter to NTIA Assistant Secretary Larry Strickling, Inspector General Todd Zinser stated that his staff would “obtain additional facts” regarding the Motorola grant award in response to complaints from Santa Clara County Executive Jeff Smith, who wrote the OIG office about the matter on Nov. 1.

Smith wrote his complaints in the aftermath of an NTIA review that upheld the Motorola grant award, despite concerns raised by Santa Clara County and the city of San Jose that NTIA did not consider all aspects of the grant application.

In his letter to Zinser, Smith stated that an “investigation is warranted and necessary in order to ensure that public funds are administered in a transparent and fair manner at all levels of government.” Smith further asserted that the grant was “secured in a manner that lacked transparency and prudence.” In particular, Smith noted that the decision to team with Motorola in a public/private partnership never was voted upon by legal representatives of the government entities that are involved in the project.

I’ve been questioning the entire grant process for some time. The NTIA and the USDA’s Rural Utilities Services division were inundated with applications — some of them many thousands of pages long — asking for broadband stimulus funds. In the first round alone, about 2,200 bidders applied for almost $28 billion in broadband stimulus money. That was nearly seven times the $4 billion available for the program in the initial round.

There were all sorts of complaints about the application and vetting process, and at least one mistake has come to light. In September, the USDA rescinded a $19-million broadband stimulus grant/loan that was announced on Aug. 18 to a Texas wireless company that had been charged by the U.S. Securities and Exchange Commission in April with alleged federal securities violations.

The information came to light after an investigative report published by StimulatingBroadband.com questioned the award to Dallas-based TierOne Converged Networks, since the company had been charged by the SEC and two of its officers had been cited by state securities regulators in Colorado and Texas the two previous years.

Applicants to the broadband stimulus funds who saw their proposals fail can’t get anywhere by voicing their complaints, but the OIG can. Hopefully, its inquiry into the Motorola grant is just the beginning of a larger effort that will result in some much-needed light being shed on just how the NTIA came to its funding decisions.

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